Transglutaminases form an isopeptide crosslink between an acceptor amide group of a protein bound glutamine residue and a donor e-NH2 of a protein bound lysine residue, thereby forming an insoluble macromolecular protein complex. In the epidermis, at least three enzymes are thought to function by crosslinking certain defined structural proteins to form the cornified cell envelope, and are transglutaminases 1, 2 and 3. We are studying these enzymes in detail. By use of a new specific antibody, we have found that the transglutaminase 1 enzyme in cultured keratinocytes or foreskin epidermal cells is very complex, since it exists in multiple soluble and membrane-bound full-length as well as proteolytically- processed forms. The partitioning between the soluble and membrane phases is controlled by differential acylation by myristate and palmitate. The enzyme is widely expressed in the epidermis and appendageal structures, as well as in other non-epithelial tissues. The proximal promoter region of the transglutaminase 3 gene is located within the first 126 bp above the transcription start site, and consists of an Sp1 motif modulated by adjacent ets-like motifs. These are sufficient to confer epithelial-specific expression. This region also contains a calcium responsive element.